America's Benefit Specialist May 2023

MEDICARE MATTERS

AETNA AWARDED THE CITY OF NEW YORK MEDICARE ADVANTAGE PLAN CONTRACT FOR RETIREES The City of New York Office of Labor Relations recently announced the award of a Medicare Advantage contract for City retirees to Aetna, a CVS Health company. The plan is being offered to approximately 250,000 retirees and their eligible dependents age 65 and over. “We’ll offer a customized Medicare Advantage plan that provides high-quality, affordable and convenient healthcare for City of New York retirees who’ve devoted their careers to serving New Yorkers,” said Dan Finke, executive vice presi dent, CVS Health, and president, Aetna. For the first time in history, Medicare will have the ability to negotiate lower prescription drug prices because of the Inflation Reduction Act, the law that lowers healthcare and prescription drug costs. CMS recently issued initial guidance detailing the requirements and parameters—including requests for public comment—on key elements of the new Medicare Drug Price Negotiation Program for 2026, the first year the negotiated prices will apply. Alongside other provisions in the new drug law, the Medicare Drug Price Ne gotiation Program will strengthen Medicare’s ability to serve people currently in Medicare and for generations to come. “For far too long, millions of Americans have had to choose between their prescription drugs and other monthly expenses,” said HHS Secretary Xavier Becerra. “Through the Medicare Drug Price Negotiation Program, we will make sure seniors get a fair price on Medicare’s costliest prescription drugs, promote competition in the market, and ensure Medi care is strong for beneficiaries today and into the future.” “Drug price negotiation is a critical piece of how this his toric law improves the Medicare program,” said CMS Admin istrator Chiquita Brooks-LaSure. “By considering factors such as clinical benefit and unmet medical need, drug price nego tiation intends to increase access to innovative treatments for people with Medicare.” CMS is releasing its initial guidance for how Medicare intends to use its new authority to effectively negotiate with drug companies for lower prices on selected high-cost drugs. The negotiation process will focus on key questions, includ ing but not limited to the selected drug’s clinical benefit,

The contract is valued at more than $15 billion over the initial five years and four months term of the agreement. The move from traditional fee-for-service Medicare to a Medicare Advantage plan is expected to potentially save the city $600 million annually. The five-year initial service period for the contract begins September 1, 2023, through December 31, 2028, with the option to renew for three, two-year terms. Additionally, at the end of the third two-year renewable option period, the con tract becomes renewable by mutual agreement for two-year terms in perpetuity.

HHS RELEASES INITIAL GUIDANCE FOR MEDICARE DRUG PRICE NEGOTIATION PROGRAM

the extent to which it fulfills an unmet medical need, and its impact on people who rely on Medicare. As a result of nego tiation, people with Medicare will have access to innovative, life-saving treatments at costs that will be lower for both them and Medicare.

AS A RESULT OF NEGOTIATION, PEOPLE WITH MEDICARE WILL HAVE ACCESS TO INNOVATIVE, LIFE-SAVING TREATMENTS AT COSTS THAT WILL BE LOWER FOR BOTH THEM AND MEDICARE.

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